Many youngsters prefer to rake in some work experience before pursuing their higher education. Especially for courses like MBA, corporate experience gives you an edge during the admission process as well as helps you in grasping the concepts better. However, if you wish to finance your further education, it is important to manage your earnings smartly. Read on to know some tips which will come handy:
Research about higher education costs
It is a good idea to make a list of colleges or universities which offer the education course of your choice. Find out about the various costs involved such as course fees, hostel or other such accommodation, study material including laptops, etc. Also, do not forget to extrapolate the total cost to consider aspects like inflation, etc.
Zero down on the timeframe
Knowing when you would like to pursue your higher education is extremely helpful in planning and investing. The investing options will differ according to the time available with you. For instance, if you wish to go ahead with your course in the next 3-5 years, you will have more investment or saving options at your disposal, compared to if you have only a year or so to save.
When you have just started to earn, it is difficult to invest lump-sum amounts. Hence, smaller investments on a regular basis works well for such cases. Systematic Investment Plan (SIP) allows investors to invest a particular sum of money in a Mutual Fund scheme on a periodic basis. The best part is that one can invest as low as Rs. 500 per month. The frequency of investment can also be chosen by the investor as per his or her convenience.
There are numerous Mutual Fund schemes available. One can choose a scheme as per their financial goal and risk appetite. Hybrid Mutual Funds may be more suitable for youngsters who are trying to save money for their higher education as it invests in a combination of equity and debt. They have the potential for higher returns (due to the equity component) but have a relatively lower risk quotient.
One can also choose traditional saving investment options if one does not want to take any risk in their investments.
Make a budget (and stick to it)
Higher education in India is a costly affair. Hence, if you want to take the onus of funding your own education, you need to be disciplined in your spending. It is extremely important to make a monthly budget and keep a record of your expenses. This will help to keep a check on your outflows and ensure that you stick to the budget allocated to various things.
Sometimes even with a disciplined savings plan, you may not be able to amass the entire course amount. But worry not, an education loan can help you fund (partly or fully) your higher education easily. These days many banks offer this facility. If you feel that you want to take this route, ensure that you maintain a good credit history. Pay off your credit card bills on time and try not to take any other loans or increase your financial liabilities.
Most importantly, do not lose focus! Work hard, save efficiently to have a smooth and hassle-free learning experience late.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.